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Then I go to Google and type in link:domain.comBy looking at the number of links coming in and where the links are coming from I can get a good assessment of wether this is legit or not.

If it is a blog I do another search in Google:

Inurl:domain.com “hello world”This will reveal (if they did not specifically delete this) when the blog was installed.

Another way to do this is to add /wp-commentsrss2.php to the end of the Wordpress blog’s URL – so if the blog is www.mywpblog.com I would check this URL: www.mywpblog.com/wp-commentsrss2.php - this will give you an RSS feed of comments. If it’s a new blog, often times you will have the sample comment installed, displayed with date for the date the blog was installed.

Another one is the “About” page, that one is often left up with the date on it, this date is the installation date of the blog.

It's quite funny, but the best links I have meet at least one of these criterias, being that most meet 2 or even 3 of those.
I'm not saying that you're not right, I'm just dubious about all the latest Algorithm changes.

Here's a list of linking requirements slightly modified from one I found on GaF (I think it was GaF...):

Bids to submit to Web/Links Directories or article sites will be ignored.

Links must be permanent, free, ONE WAY/non-reciprocal and static.

Links should contain the target key phrase as a text hyperlink and links should be spread out to point to relevant pages of the website, not just the home page and should be followed by a short description.

The actual link page and the home page must both be PR4+.

All links must be FREE and shouldn't appear in a paid links slot such as: "sponsored" links, advertisers, links, ads or any other slot links that will show the search engines. URL must nor contain .../links/

Link page must be search engine friendly, i.e. no redirects, cloaking, etc. Page must not be excluded by robots.txt and the link must not utilize the rel=nofollow tag.

Link pages must be cached by Google within the last 30 days.

No FFA, guest books, links within forums, links within newsgroups or links farms, Links from link exchanges etc. and never participate in any commercial web rings or link exchange programs, from bad neighbourhoods (porn or other offensive websites) and no more than 20 outbound links on each web page (where link is placed).

One link per domain, all from different c-classes/different IP's.

Links from websites that already link to our site will not be counted.

I want to know one thing - You have competitors and they always finds your backlinks and try to accumulate those so that they can reach ahead of you. Now when you buy links it means they get to know that. If they report the same thing to G, then your website will surely be going to ban.

Then why webmasters are still finding ways to buy links? Any reason how you can get rid of getting banned from G even if you have paid links.